Sold my manufacturing company two years ago. After fees and taxes I walked away with a little over $2.1M. Curious what others did with their proceeds. I parked most in index funds and a CD ladder. Bought a small lake cabin for cash. No regrets so far but always wondered if I should have done something more productive with it.
Exit Planning
What I did with my business sale proceeds
I did almost the same. Half in a three fund portfolio, half in Treasury ladders. My advisor pushed me toward some real estate syndication and I passed. Two years later that deal is down about 30% so I feel okay about being boring.
Bought a small commercial building and leased it back to the new owner. Works fine but I underestimated how much I'd hate being a landlord in retirement.
What's your age and how much do you need per year? That changes everything. At 58 with modest spending the index approach is probably fine. At 45 with kids still in school I'd be more cautious.
Fair point. Im 61 and we spend about $90k a year. The funds plus some rental income cover it comfortably. I just have this nagging feeling the money should be working harder.
It's working. You don't have to justify boring.
Sorry if that came off blunt, I just mean the pressure to optimize every dollar atfer a sale is real and often not worth it.
I used $400k of mine to start a second business. Lost $250k of it in eighteen months. I don't recommend that unless you really miss the work. The The rest went into a Vanguard account and has done better than I did.
Carlyle_jo that's the pattern I've seen with a lot of sellers. The first year feels empty and people itch to jump back in. Often with worse results than just holding still.
I haven't sold yet but I'm watching thixs thread closely. My CPA keeps saying to earmark a chunk for taxes before anything else. Did any of you get surprised by the tax bill?
Not surprised but i spent way too much time on the estimated payment schedule. The sale closed in late November and I nearly missed a payment because I assumed the proceeds counted for the following year.
Same here. I had a good CPA but the timing of the final payment still caught me off guard. Set aside 25 percent from the start if you can.
We sold last year. Put 1.2M into a revocable trust for the kids, 600k into a donor advised fund, and kept 800k for ourselves. The charitable piece was the best decision I made. It forced me to actually think about what the money was for.
seventeen_crows, how did you decide on the DAF amount? We're considering something similar but the numbers feel arbitrary.
We picked a number that felt generous but not so large we'd resent it later. No real formula. I didn't want to be the person who gives at the end of life and has no idea whether the money did anything.
Everyone in this thread seems way more disciplined than I was. Any of you deal with family asking for money afterward? That has been the real headache for me.
Yes. I said no to a nephew and it ended the relationship. I'd do it again but I wish I had set expectations before anyone knew the sale closed.